Quick answer: The most common FCA compliance mistakes general insurance brokers make include failing to evidence Consumer Duty outcomes, conducting superficial needs assessments, maintaining weak training frameworks, and failing to run root cause analysis on complaints. Each is examined in detail below.
FCA compliance mistakes among general insurance brokers are more common than most firms would like to admit, and more costly. Whether you are a small regional broker or a national intermediary, the FCA’s expectations are the same: evidence-led, outcomes-focused, and continuously monitored. This guide breaks down these mistakes the regulator sees most often, what good looks like, and what you should do right now.
Treating Consumer Duty as a tick-box exercise
Of all the FCA compliance mistakes general insurance brokers make, this is the one the regulator finds most frustrating and most frequent. Consumer Duty has been in force since July 2023, yet many brokers have produced a policy document, filed it away, and considered the matter closed.
The FCA is explicit: Duty is an outcomes-led framework, not a documentation exercise. Brokers must demonstrate through evidence, management information, and ongoing monitoring, that customers are actually receiving good outcomes across the four outcome areas: products and services, price and value, consumer understanding, and consumer support.
If your firm cannot show the FCA how it knows customers are achieving good outcomes, your Consumer Duty programme is not fit for purpose, regardless of how polished the written policy appears.
Fix it: Build a monitoring framework that tracks genuine outcomes, not just outputs. Calls answered and complaints logged are outputs. Claim acceptance rates, policy cover adequacy, and customer comprehension scores are outcomes.
Weak suitability and needs assessments
Inadequate needs assessment is one of the most consequential FCA compliance mistakes general insurance brokers make, particularly for commercial lines. The FCA requires brokers to identify customer needs and recommend products that genuinely meet them yet fact-finds are often cursory, templated, and insufficiently tailored.
For commercial clients, the complexity of their risk profile demands a depth of analysis that many brokers are not conducting. When a customer later suffers an uninsured loss and the broker cannot demonstrate that adequate needs analysis was carried out, the compliance and liability exposure can be severe.
Fix it: Review a sample of your customer files. If the fact-find documentation looks identical across multiple clients, it is almost certainly being completed after the call rather than during it, a significant compliance risk.
Inadequate training and competency frameworks
Training failures sit behind almost every significant FCA compliance mistake general insurance brokers make. The FCA expects staff to be genuinely competent not merely in possession of a completed annual e-learning module. Staff must understand the products they sell, the regulatory framework they operate in, and how Consumer Duty expectations translate into their daily customer interactions.
Many brokers’ training records are patchy, competency assessments are superficial, and CPD frameworks are misaligned to current regulatory requirements. When the FCA investigates customer harm, inadequate training is almost always a contributing factor.
Fix it: Implement documented competency assessments before staff advise customers. Ensure CPD is linked to regulatory change, particularly Consumer Duty developments, and that records are current and auditable.
Complaints handling without root cause analysis
The final and perhaps most telling FCA compliance mistake general insurance brokers make is resolving individual complaints satisfactorily while never identifying whether a systemic issue exists. The FCA uses complaints data as one of its primary windows into how a firm treats customers and it expects that data to drive change, not merely resolution.
A broker that resolves complaints individually but conducts no root cause analysis is, in the FCA’s view, failing its customers and failing to demonstrate the proactive culture Consumer Duty demands. Complaints logs that record outcomes without categorisation, trend identification, or remedial action are a red flag in any supervisory review.
Fix it: Categorise every complaint by root cause. Review trends quarterly. Where patterns emerge, in particular products, customer segments, or sales channels, treat them as Consumer Duty failures requiring immediate remediation.
FCA compliance mistakes among general insurance brokers rarely happen because firms do not care about doing the right thing. They happen because compliance is treated as a documentation exercise rather than a live business discipline. The brokers that stay ahead of regulatory scrutiny are those who regularly test their frameworks against reality, honestly assess where gaps exist, and take remedial action before the FCA comes asking. If any of these areas above sounds familiar, the time to address it is now.
This article is for informational purposes only and does not constitute legal or compliance advice. Brokers should consult their compliance function or a qualified regulatory adviser for guidance specific to their business.
Written by the Ecompli founder — With over 20 years in financial services and having founded Ecompli in 2006, these blogs are written by a specialist with hands-on expertise in FCA regulation across the mortgage, general insurance, equity release, and insurance claims handling sectors.
